Economic growth in Armenia will significantly accelerate this year after a sharp slowdown recorded in 2016, Minister for Economic Development and Investments Suren Karayan insisted on Thursday.

According to government estimates, the Armenian economy grew by only 0.5 percent last year, down from 2.2 percent that had been forecast by the authorities in Yerevan. The Armenian state budget for 2017 approved by parliament late last year is based on the assumption that economic grow will reach 3.2 percent.

Karayan stood by this projection when he spoke to RFE/RL’s Armenian service (Azatutyun.am). “In my view, we will register a growth rate of at least 3.2 percent in 2017,” he said.

“I am even more optimistic and can say that we are now trying to exceed that target set by the 2017 state budget,” added the minister.

Karayan spoke of “quite a bit of work” done by Armenia’s recently reshuffled government on the economic front. He said Prime Minister Karen Karapetian’s cabinet anticipates a sizable increase in foreign direct investment which has steadily declined in recent years.

Echoing a recent statement by Finance Minister Vartan Aramian, Karayan also said: “We need to register a growth rate of at least 5 percent for several years running in order to reduce poverty and solve other socioeconomic problems.”

Aramian has attributed the 2016 slowdown to a revision of Armenian agricultural output calculated by the National Statistical Service and other government agencies. He said it exposed a double-digit decline in the agricultural sector mainly resulting from unfavorable weather conditions.

Growth was also dragged down by a continuing fall in remittances from Armenian migrant workers in recession-hit Russia and other countries, which has been suppressing consumer spending.

Hit hard by the collapse of oil prices and Western sanctions, the Russian economy contracted for a second consecutive year in 2016. In its latest World Economic Outlook released earlier this week, the International Monetary Fund insisted that Russia will return to growth in 2017. Renewed growth there could push up remittances inflows to Armenia.

“As the global economy rebounds and Russia’s recession passes its nadir, economic activity in Armenia is expected to moderately accelerate over the medium term,” the World Bank said in a November 2016 report.